Navigating Volatility: The Long Game in Stock Market Investing

A Historic Surge Amidst Market Turmoil

• The S&P 500 jumped 9.5% on Wednesday, recording its largest one-day rise since October 2008—a striking moment in the market’s timeline.
• Despite this leap, the stock market remains 2.8% lower since the latest tariff announcements and is still down 11.2% from its February peak.
• Sticking with long-term market strategies consistently outperforms trying to time the market, even through significant volatility.
• Note for Investors: Our top 10 stock picks for the current moment 

Weathering the Storm: Why Patience Pays Off

It’s been a rollercoaster week on Wall Street. On Wednesday, the S&P 500 experienced a remarkable 9.5% rise after President Trump delayed new tariffs for 90 days.

Many reports hailed this substantial increase as a historic event—and with good reason. It marked the largest single-day gain for the S&P 500 since October 2008. The Nasdaq Composite and Dow Jones Industrial Average also saw significant rebounds, reminiscent of two massive spikes during the subprime mortgage crisis aftermath, spurred by quantitative easing and drastic interest rate cuts.

Such events underline the historical significance of this week. It’s undeniably momentous.

A Reality Check Amid Gains

Despite Wednesday’s promising rise, it was far from a triumph. The S&P 500 didn’t hit new heights but rather returned to levels seen just last Thursday, following initial tariff announcements. From April 2 to April 8, the index had dropped 12.1%.

Even after the recent surge, it remained 2.8% lower compared to the eve of Trump’s tariff revelations. Year-to-date, the S&P 500 was down 7.2%, and it had fallen 11.2% since its February peak.

Investors who bought stocks or index funds during this dip might count themselves fortunate, hinted at by surging trade volumes for funds like SPDR S&P 500 Trust ETF and Invesco QQQ Trust.

Yet, every stock trade requires a buyer and a seller. Many—firms, algorithms, and individuals alike—panicked and sold at unfavorable prices. Hopefully, you were on the buying side of those transactions.

Keeping the Long View

I’m not suggesting last week’s trough was an ideal market-entry point. The S&P 500, though doubling down, stayed around 13% above its peak in 2021 just before the latest downturn.

Buying SPDR S&P 500 ETF shares on a bad day in 2021 and selling at a lower point last week could still yield a profit. Time builds wealth, more than trying to “beat” the market.

The savvy investor knows that holding diversified assets long-term is key—weathering all ups and downs on the journey.

Strategic Steps in Market Volatility

Increasing your portfolio when prices fall is wise, but selling during downturns guarantees poor outcomes and missed opportunities.

Market dips, even those caused by tariffs, may be followed by further declines. However, that doesn’t make your initial investments mistakes. Building cash reserves to capitalize on future lows, possibly via automated dollar-cost averaging, secures gains in a rebounding market.

The market’s recent tumult shouldn’t deter your strategy, except to seize good stocks and funds at discounted rates. Maintain your course, avoid fretting over short-term fluctuations, and continue investing in your financial future.

Your future self will appreciate your calm demeanor in today’s volatile climate. Remember, “this, too, shall pass.”